Cryptocurrency became one of the hottest sensations of 2017 when the value of bitcoin soared high. It experienced 20-fold rise in its value in December as compared to its value in early 2017. It captured the attention of the world. Not only investors or wealthy people but also common people looked out for ways to invest in cryptocurrency and make money. However, some of the experts notified that it is a bubble which will burst soon. On the other hand, some considered it as one the lucrative segments emerging in the world. South Korea, Japan, China, and other Asian countries became one of the biggest markets in the world for cryptocurrencies. These markets also became one of the prime targets of hackers to steal the money from the largest exchanges in these countries.
Recently, Coincheck Inc., the biggest cryptocurrency exchange in the Japanese market suffered a huge blow when hackers stole more than $500 million in cryptocurrency. This issued a huge concern for the policy makers in other countries to regulate the cryptocurrency exchanges.
Japanese government began a licensing system for exchanges which trade in cryptocurrency. On the other hand, South Korean authorities have been discussing whether to ban cryptocurrency exchanges. Coincheck’s executives informed that it will use its own funds to reimburse the losses of over 260,000 clients from its own pockets. Market analysts have expressed that despite Coincheck’s promise to reimburse, it is important to focus on security lapses in exchanges. Moreover, trading through centralized platforms have become risky as they are more prone to hack. So, this theft would lead to investors choosing peer-to-peer methods. This massive heist also calls for focus on more regulations on exchanges and advantages of decentralized ways of trading.
The Financial Services Agency of Japan asked Coincheck Inc. to submit its report highlighting the reasons for heist, its response to clients, and future measures to be taken by February 13. This heist registered itself in a long list of thefts of cryptocurrency exchanges and wallets. The hackers have been targeting digital wallets and exchanges as prices of digital currency increased. Many institutional investors turned their back on cryptocurrencies due to lack of confidence and lack of little or no regulation. However, some more investors are entering the market after CME Group Inc. and CBOE Global Markets Inc. began bitcoin future trading in the U.S. in December 2017.
The theft in Japan caused an uproar in social media and clients gathered in front of Coincheck headquarters after discovery. Financial regulators of the country have been trying to avoid such incidents after introduction of a licensing system for cryptocurrency exchanges in April 2017. There were only four months remaining for Coincheck to receive its license, but it could operate and advertise on television. Though the future of Coincheck is yet unclear, it stated that it will restart trading sometime soon.
The Japanese cryptocurrency trading firm informed that it has been working in cooperation with other exchanges to track stolen tokens. The executives of Coincheck expressed optimism about recovery. This robbery has made other policy makers to Introduce stringent regulations in their countries. Though many policy makers do not know how exactly this will work out, this theft would fasten their seatbelts to take necessary measures to avoid it in the future. Those regulations can help in avoiding security lapses through which hackers have been stealing huge amount of money.